The Complete Guide to Money by Dave Ramsey

The 3 Bullets

1. Dave spent some time in the book overviewing what Gary Smalley shared as five key differences he’s noticed in male and female behavior. As Dave outlines also, it’s imperative that we are cognizant of these differences when talking finances with our partner. Men might find that they are connecting well by just creating a collaborative budget, spending plan, or cash flow plan, while women yearn for a great deal of communication and talking throughout the process. Of course, I’m not married at this point in time but in the future I can imagine that the approach to finances will be cooperative and that of a partnership activity.

2. The other important section was a focus on tithing. Now, some people may interpret the Bible differently and some say that tithing is no longer something that God expects from His people. I won’t get into the depths of that but I’ll leave it at this, I do tithe. I find tithing to be an essential part of my life, and especially the way that I steward the resources I’m entrusted with. What jumped out to me was a section I’d never really thought about because of the person that I am. Dave shares that sometimes people have said that they don’t tithe because their church does not steward finances well. He writes, “This one scares me. I always respond, ‘So you can’t trust them with your money, but you’re trusting them with your children’s souls?’” That’s the way that I strive to manage my resources. Look at the outcome. Look at the results. Look at the value. Should I be spending money here? Should I be spending time there? Should I be spending energy here? Those are questions we should be able to answer pretty quickly — especially if we are intentional with the way that we lead our lives.

3. When I have children, I might have to model a lot of the way that I teach them about finances after what Dave Ramsey did for his children. There were some important practices that he incorporated for them. One of the things that was most interesting to me was that of allowing them to manage finances early on. Rather than buying clothes for them, they deposited money into their accounts and left it up to their children to manage the finances and determine how to spend everything. I realize that this might seem a little high pressure, but it will happen eventually for every single person. Why not empower children in high school and encourage and guide them?

Pg. 27, Marriage counselors tell us that couples who can agree on four major issues have a much higher probability of a successful marriage. Those four things are religion (shared household faith), in-laws (boundaries, influence, etc.), parenting, and money.

Pg. 29, In his book Making Love Last Forever, Gary Smalley lists five key differences he’s noted in male and female behavior throughout his many years of research and counseling:

1. Men love to share facts; women love to express feelings.

2. Men connect by doing things; women connect by talking.

3. Men tend to compete; women tend to cooperate.

4. Men tend to be controlling; women tend to be agreeable.

5. Men tend to be independent; women tend to be interdependent.

Pg. 42, Around age thirteen, savings became a big deal to our kids because we told them flat out that we were not going to buy them a car when they turned sixteen. If they wanted some wheels, they’d have to save up and buy their own. I did offer them a match on their savings, which we called 401DAVE, but they knew up front that Sharon and I would only match their own savings dollar for dollar.

Instead of giving them cash like we’d done when they were younger, we paid their commissions by depositing the money directly into their accounts. We also stopped paying for things like clothes and sports fees with cash or checks and deposited all that money into their accounts, too. From there, it was up to them to manage and budget the money. If they wanted to go to the movies, buy school clothes, and pay their hockey or cheerleading fees, they had to do it themselves.

Pg. 54, “A budget is just telling your money where to go, instead of wondering where it went.” — John Maxwell

Pg. 86, If you want to take control of your money, you’ve got to amputate the out-of-control lifestyle. For most people, that starts with the car payment.

Pg. 180, The Basic Rules of Negotiating:

1. Always tell the absolute truth.

2. Use the power of cash.

3. Understand and use “walk away” power.

4. Shut up! Don’t talk too much.

5. “That’s not good enough!”

6. Good guy, bad guy.

7. “If I” take-away technique.

Pg. 209, I tell people to put 25 percent in each of these four types: growth, growth and income, aggressive growth, and international.

Pg. 220, Wise, mature consumers think about stuff like that — not to rob themselves of any fun, but to make sure their fun fits in their overall plan. I want you to have some fun stuff; I just don’t want your stuff to have you.

Pg. 232, You should always — always — roll your company-sponsored retirement plan into an IRA when you leave the company. The 401(k) is great as long as you’re with the company, but once you’re gone, you can roll that money out into a regular IRA, which gives you more options. If you’re in a 410(k) plan, you probably have ten to twenty mutual funds to choose from.

Once you roll that into an IRA, though, you’ll have your pick of around eight thousand funds. The field gets a lot bigger, so you have a better chance of finding some outstanding funds to invest in within the IRA.

But one word of warning: Do not bring the money home; make it a direct transfer into an IRA!

Pg. 233, The main thing to remember is that rolling a 401(k) into a Roth will instantly create a big tax bill. Remember, all the money you put into that 401(k) was pretax, which means you haven’t paid any taxes on that money yet. A Roth, though, is funded with after-tax dollars. So, if you move funds from a pretax 401(k) into an after-tax Roth IRA, those taxes will be due immediately.

Pg. 299, Look, I don’t want you renting forever as a way of life; I just want you to be ready before you buy! Make a goal to hit Baby Step 3 and then save up a big down payment as quickly as possible! I love homeownership, but it will kill you if you’re not ready for it.

Pg. 308, The money flowed right through her without a pause because she was just doing what the owner (me) told her to do with the money. It didn’t even occur to her to wrap her fingers tightly around that money, because it wasn’t hers to begin with. It’s always easier to give someone else’s money away, because we feel no attachment to it.

The Bible says, “The earth is the Lord’s and the fulness thereof.” You know what that means? God is the owner. He owns it all. When we view our wealth like that, then suddenly giving becomes easy because we’re not giving our money away at all. We’re just asset managers for the Lord, doing what the owner (God) tells us to do with the money.

Pg. 309, If you go back in history, you’ll find that “steward” is not a Christian term at all. It’s an Old English term that means “one who manages another’s financial affairs.”

(In the movie, Braveheart there was a castle and inside) lived the lord of the realm, the guy who owned everything — all the land, farms, building, businesses, commerce, etc. He lived in the biggest, nicest castle in the realm.

Nearby, you’d see another large estate that was almost as nice as the lord’s. This is where the lord’s steward lived. The steward was the person who actually managed all of the lord’s assets. The steward managed all the crop rotations, labor, taxes, banking, marketplace — everything. He didn’t own any of it, but he was responsible for it all because the lord had entrusted it to him.

So when the King James translators were working on the first English version of the Bible in 1611, they came to this concept of biblical ownership and our role as managers, and they immediately understood. That’s why the word “steward” appears in the King James Bible so much; it was a common, easily understood term that immediately emphasized managership, not ownership.

Pg. 314, The word “tithe” isn’t a spiritual term. It’s like “steward,” in that it was just a regular, run-of-the-mill word that the church kind of took over. “Tithe” is actually a math term; it simply means a tenth.

The instruction to give a tenth of your increase is biblical, dating all the way back to Genesis 14:18, where Abram felt God’s call to give Melchizedek a tenth of everything he had. Later in Genesis 28:22, Jacob also felt God’s call to give a tenth of his increase to the Lord. The affirmation of the tithe and the command to obey it appears throughout both the Old and New Testaments, and it always refers to a tenth of your increase.

A lot of Christians believe that the tithe is a holdover from the Law and therefore they don’t have to observe it. I personally disagree with this, though, because the tithe appears before the law, and it is affirmed in the New Testament by Jesus in Matthew 23:23 and Luke 11:42. Whether your church tradition teaches tithing or not, this is absolutely not a salvation issue. It’s a matter of biblical interpretation, and honestly, it’s between you and God. I’m not here to be your conscience or play the part of the Holy Spirit; I’m just telling you what I’ve discovered about giving and tithing.

The Bible tells us to give a tithe. If you’re a believer, that means you give it off the top all the way through. Of course, once you work the Baby Steps and you’re out of debt and building wealth, you’ll be free to give like crazy above and beyond the tithe, and that’s a fantastic goal!

The tithe should go to your local church, which provides the same function as the Old Testament storehouse. Since Israel was largely an agricultural economy, a good percentage of the tithe was given as crops. Those crops went to the storehouse, which was used to feed the poor, widows, orphans, and the priests.

Not only did the storehouse take care of widows and orphans, but it also made sure the priests were well fed. Today’s translation: we should pay our pastors well. I’ve looked at the compensation models for hundreds or thousands of churches across the country, and I can tell you one thing for sure: we’re not paying our pastors what they are worth. We expect our pastors to be world-class speakers, scholars, writers, counselors, leaders, and administrators. We expect them to be on call 24/7, and we feel neglected if — heaven forbid — the head pastor doesn’t personally show up when we spend a night in the hospital.

Pg. 317, Sometimes I’ll hear someone say that they don’t give a tithe to their local church because the church doesn’t handle money well. This one scares me. I always respond, “So you can’t trust them with your money, but you’re trusting them with your children’s souls?” Listen, if you can’t trust your church with your money, then you have two choices: Lead the charge to fix the problem or find another church. Personally, I think you could get in there and help shake things up. You could do a lot of things, but whining shouldn’t be one of them. We have enough whiny Christians sitting on the sidelines. Either get in the game or stop complaining!

Pg. 319, We’ve talked a lot in this book about building wealth. You may have noticed that I am in no way ashamed of that fact. I have absolutely no guilt at all over the fact that I’ve become financially successful over the years. I have worked my tail off and I’ve truly been blessed, and I thank God for that. But like Andrew Carnegie said, “Surplus wealth is a sacred trust to be managed for the good of others.”

Pg. 322, “Aside for the freedom of being debt-free, the message of giving went a long way with us. We now have more money than ever, yet spend so much less on ourselves and find such a thrill in giving away to others who need it. The dreaded tithing word finally has meaning, and we are faithful givers and truly enjoy doing it. We have direction and goals — attainable goals — and my husband and I are more connected in our thoughts and our dreams.” — Kristy, Sylvania, OH